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Opening Bell: U.S. Futures, Commodities Rally As China Eases COVID Restrictions

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJun 28, 2022 09:14AM ET
www.investing.com/analysis/opening-bell-us-futures-commodities-rally-as-china-eases-covid-restrictions-200626387
Opening Bell: U.S. Futures, Commodities Rally As China Eases COVID Restrictions
By Investing.com (Pinchas Cohen/Investing.com)   |  Jun 28, 2022 09:14AM ET
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  • China reduces isolation for visitors
  • Oil extends rally
  • Yields up

Key Events

Dow Jones, S&P 500, NASDAQ 100, and Russell 2000 futures and European stocks traded higher on Tuesday as China reduced its COVID quarantine requirement for international travellers. Investors hope the move will improve global supply chains thus reducing the chance of global recession. Recent weaker than expected economic data from the US has also raised the possibility that the US Federal Reserve may not hike rates as much as previously thought.

Global Financial Affairs

In Europe, the STOXX 600 Index rally was led by mining and energy stocks which would benefit from China's reopening as it is the single largest global commodity importer and top metal consumer. 

Asian shares ended a volatile session in positive territory.

China's Shanghai Composite outperformed, rising 0.9%, and technicals suggest there is more room to rally.

SSEC Hourly
SSEC Hourly

The index completed a third continuation pattern, suggesting traders will repeat the same sharp move before the range.

An advance on Wall Street on Monday fizzled with all four indices closing lower. The 7% rally forecast by J.P. Morgan this week, as pensions and sovereign wealth funds rebalance portfolios, has yet to materialize.

The recent S&P 500 rally may simply be a typical bear market bounce.

S&P 500 Daily
S&P 500 Daily

We can see a clearly defined Falling Channel, in which the current move higher is nothing more than a corrective move. A bottom would require that peaks and troughs ascend.

Treasury yields on the 10-year note rose for the third day after yesterday's 7-year bond auction failed to garner demand. Rising yields have been another reason for recent equity selloffs.

The dollar fell for the third day. Yesterday, we outlined the possibility of a reversal and despite the extended selloff, the price remains in range so we are not yet calling the pattern a failure.

Gold rebounded on dollar weakness and nearing a bullish stronghold.

Gold Daily
Gold Daily

The yellow metal found additional demand at the bottom of a Rising Channel.

Bitcoin rose slightly after a two-day decline. The cryptocurrency is languishing at the bottom of a possible bearish pattern.

Bitcoin Daily
Bitcoin Daily

It could be developing a bearish pennant or a Rising Flag and a downside decisive move would complete the pattern.

Oil extended its rally on the news from China.

Oil Daily
Oil Daily

The price flipped, blowing out a bearish pennant with an upside breakout. Moreover, the rising trend from the December low remained intact.

Up Ahead

  • US GDP figures are published on Wednesday.
  • US Fed Chair Jerome Powell and ECB President Christine Lagarde are due to speak on Wednesday. 
  • On Wednesday, crude oil inventories are printed.
Opening Bell: U.S. Futures, Commodities Rally As China Eases COVID Restrictions
 

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Opening Bell: U.S. Futures, Commodities Rally As China Eases COVID Restrictions

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Comments (5)
Zack Estrella
Zack Estrella Jun 30, 2022 6:22PM ET
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OK try again..
Sterling Lightside
Sterling Lightside Jun 28, 2022 5:27PM ET
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Poor little Monkey Writer. You couldn't buy a clue.
Pinchas Cohen
Pinchas Cohen Jun 28, 2022 5:27PM ET
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How might I improve my writing?
Richard Lomax
Richard Lomax Jun 28, 2022 8:12AM ET
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Most refreshing to read such good and concise market analysis, thanking you
Pinchas Cohen
Pinchas Cohen Jun 28, 2022 8:12AM ET
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Thanks, Richard.
Francis Lim Wei
Francis Lim Wei Jun 28, 2022 8:08AM ET
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appreciate your article , but China is not buying US crude oil they bought from russia at 55% discount , India and Indonesia also joing the purchase
Son Yay
Son Yay Jun 28, 2022 8:08AM ET
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Context: article was saying on speculation of reopening in future, not now
Pinchas Cohen
Pinchas Cohen Jun 28, 2022 8:08AM ET
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Son Yay  Also, it's a global market.
play cold
play cold Jun 28, 2022 7:16AM ET
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Thank you
 
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